It is a pleasure to join you this afternoon for the international conference on impact investing. My thanks to the organisers, the Financial Services Development Council and the Global Impact Investing Network for putting a deserved spotlight on this meaningful subject in Hong Kong.
I am grateful, too, to the high-profile audience here today – to all of you – more than 200 ESG (environmental, social and governance) specialists, asset owners and managers, including family office principals, senior corporate executives and wealth management professionals from Hong Kong and around the world.
Each of you, in your own distinct way, mobilises private capital to enterprises and projects, determined to drive long-lasting benefits to societies and the environment.
Today’s theme, “Navigating the Future of Impact Investing in Asia,” is certainly timely.
As alluded to by Laurence (Chairman of Financial Services Development Council Laurence Li), the size of the global impact investing market surpassed the US$1 trillion mark last year.
In fact, some 170 institutions from 39 economies have signed on to the Impact Principles, ensuring that impact considerations are integrated throughout the investment lifecycle. The signatories, by the way, manage some US$500 billion in impact assets.
While Europe and the US have inspired much of the early momentum, the promise is here in Asia. As the Asian economy continues to grow and thrive, governments in Asia have commonly placed Sustainable Development Goals high on their national agenda. Our nation, China, is an active participant in this respect. It is a major contributor to the world’s poverty reduction: by having lifted close to 100 million poor rural residents out of poverty under the leadership of President Xi Jinping. It has also set out the “3060 Dual Carbon Targets”, and is steadily progressing towards them.
There exists a massive financing and investment need for sustainable projects in Asia. For instance, it has been estimated that the green financing needs in Asia alone would reach some US$66 trillion in the next three decades.
In this respect, the region’s fast-creating wealth is very helpful in sponsoring relevant investment desires.
Against this backdrop, I am confident that Hong Kong, one of the world’s leading financial centres, has what it takes to help advance the good cause.
Impact investing is very much attuned to the current investor appetite in Hong Kong. A survey conducted last year jointly by the Hong Kong University of Science & Technology and an asset management firm found that more than three-quarters of those surveyed indicated a willingness to invest in or pay attention to ESG products that have long-term positive impact.
The availability of mission-driven capital is a key to impact investing. The presence of multinational corporations, ultra-high-net-worth individuals, foundations, and an increasing number of family offices in Hong Kong, present a deep and variegated funding pool for impact investing to thrive. For some 2,600 companies of all sizes and backgrounds listed on the Hong Kong Stock Exchange – and the number is growing – many of them are committed to building a sustainable future for the generations to come. They can utilise impact investing to achieve relevant goals. Besides, Hong Kong’s vibrant private equity and venture capital sector has also become increasingly interested in meaningful investment undertakings.
On the back of such market demand, the Hong Kong Special Administrative Region Government is devoted to facilitating such activities and driving the market forward.
We are an active participant to this end. For instance, the Hong Kong SAR Government’s Exchange Fund has increasingly invested in ESG bonds, equities and private market projects. The Exchange Fund has also set a target of net zero emissions by 2050 for its Investment Portfolio.
Moreover, developing a vibrant green and sustainable finance ecosystem is high on the Hong Kong SAR Government’s agenda. The Green & Sustainable Finance Cross-Agency Steering Group, with members from the Hong Kong SAR Government and our financial regulators, is consistently steering our financial sector towards carbon neutrality before 2050. It is committed to accelerating the growth of green and sustainable finance in Hong Kong.
I trust quite many of you are aware that we are Asia’s premier green financing hub. Over US$80 billion of green debts were issued or arranged in Hong Kong last year.
Hong Kong also has a burgeoning green tech industry. Our research and industrial synergies with the Guangdong-Hong Kong-Macao Greater Bay Area will fuel this ambition.
In the Budget this year, I have envisioned Hong Kong to become an international green tech and green finance centre. To boost such efforts, a Green Technology & Finance Development Committee is being set up. A range of industry representatives, scholars, experts and business leaders will be gathered together to help forge an action agenda.
We will also organise an International Green Tech Week later this year, bringing in the most advanced players in the industry to exchange ideas, spark new ones and foster greater co-operation and collaboration.
Beyond investment, for those who are wishing to make a difference through philanthropy, Hong Kong is also an ideal destination. We have a deep culture of giving, demonstrated by individuals’ charitable donations reaching US$1 billion a year. In fact, there are nearly 10,000 charitable organisations registered in Hong Kong.
Hong Kong is keen on emerging as a philanthropic centre, where we help philanthropists to use charitable capital to benefit those in need around the world.
Ladies and gentlemen, to realise the potential embedded in our far-reaching initiatives and goals, we need to ensure a continuing supply of world-class talent. We are working on that, too.
Since December last year, we rolled out new and upgraded talent admission schemes. The response has been overwhelming. By mid-April, more than 60,000 applications have been received, and more than half of them have been approved.
For ESG talent aspiring to take their career to Hong Kong, including those of you who are in the audience, you are on our Talent List. That means, we want you.
And indeed, a new and expanded Talent List will be published soon to attract more types of talent to Hong Kong.
For friends from abroad, we welcome you to be a part of us, and I hope I will see many of you making an impact not just on finance, but in many other areas, in the not-so-distant future.
Financial Secretary Paul Chan gave these remarks at the Navigating the Future of Impact Investing in Asia conference on May 9.